Patriots Ownership Invest In Sports Betting App Founded At Harvard Business School
Massachusetts could legalize sports betting in 2022
The sports betting industry has become saturated over the last few years. There’s casinos, daily fantasy sites and social media brands all competing for space, not to mention the offshore sportsbooks and your traditional bookies.
Wagr, an app founded by two Harvard Business School alums, is taking a different approach. Though sports gambling may not be legal in Massachusetts, an investment from the ownership group of the New England Patriots may help the company’s case for a license when legislation does pass in the Bay State.
The Kraft Group notably were among investors in Wagr’s $12 million Series-A round of funding. The capital raised will be used to cover costs involved in expanding to other states, as Wagr recently launched in Tennessee.
“(Traditional operators) only make money if you lose more than you win, full stop, so the incentive alignment is misaligned,” founder and CEO Mario Malavé told Forbes on Thursday. “You’re only a profitable customer to them if you have a negative return on your personal bets.
“Our entire value proposition is, we’re not the house. Our motto is, ‘Challenge your friends, not the house.'”
The Wagr app allows users to bet on sports with a social component, so the company has no financial incentive on whether they win or lose — instead taking a 5% transaction fee.
Other investors include Reddit co-founder Alexis Ohanian and Harris Blitzer Sports & Entertainment, the ownership group behind the Philadelphia 76ers and New Jersey Devils. Patriots owner Robert Kraft is close friends with Fanatics owner Michael Rubin, who has equity stake in Harris Blitzer.
The Kraft Group getting in on the idea comes at in interesting time, with Mass. State Senator Eric Lesser announcing sports betting legislation could become reality before the November elections as part of the launch of his lieutenant governor campaign.
State politicians, casino executives, sportsbook operators and representatives from the Boston Red Sox and Boston Celtics all lobbied for Lesser’s bills this summer. Now the Patriots have entered the chat.
There’s a lot of time between now and then, but with Wagr’s founders’ ties to the Commonwealth and its alternate business model, the app is interestingly poised for a betting license. To speculate, you’ve got to imagine Kraft will help.
